Seven insurance company impairments were identified in the U.S. property/casualty industry in 2020, with five of the seven involving auto insurers, according to an AM Best special report.
Last year’s number was an improvement over 2019 when 13 impairments were identified, said the report titled “2020 US Property/Casualty Impairments Update.”
AM Best detailed the 2020 impaired insurers as:
Two standard private passenger auto writers, consisting of a Texas reciprocal exchange and a New York insurer,
Two non-standard private passenger auto insurers with business written in multiple states, primarily Florida and Texas,
A risk retention group (RRG) that provided commercial auto liability and general liability insurance to independent owner operators and small trucking companies in seven states, primarily California (where the liquidator has filed a federal lawsuit against the president and several outside advisors alleging the defendants falsified bank documents to conceal the financial condition of the entity)
A workers’ compensation insurer with business written primarily in New York and New Jersey and
A title insurer that underwrote policies primarily for owners and mortgagees of residential properties in New York.
All the 2020 impairments were placed into insolvent liquidation.
AM Best defined impairments as situations in which a company has been placed, via court order, into conservation, rehabilitation or insolvent liquidation. Supervisory actions undertaken by state insurance department regulators without court order are not considered impairments, unless delays or limitations were placed on policyholder payments.